Ethereum (ETH) Elliott Wave Analysis: Price at Key Support With Reversal Likely

Ethereum’s (ETH) price action suggests the end of a multi-month correction, with a potential reversal forming near the $2,125 support level. While bullish divergence on RSI indicates recovery, ETH must break key resistance at $2,503 to confirm upside momentum.

ETH Price Analysis

Ethereum’s daily chart presents a multi-month corrective structure, culminating in a significant decline that shaped a well-defined descending channel. The corrective pattern appears to be an extended WXY structure, with wave Y bottoming out at $2,125, a level that coincides with the 0.618 Fibonacci retracement from its prior rally. 

This alignment with a critical Fibonacci level suggests a potential exhaustion of the downtrend, especially as the daily Relative Strength Index (RSI) exhibits a pronounced bullish divergence, historically indicative of an impending trend reversal.

Despite this promising support level, Ethereum remains firmly confined within the descending channel, struggling to establish a definitive breakout. The primary resistance level to watch stands at $2,503, aligning with the 0.5 Fibonacci retracement of the preceding decline. 

A breakout above this zone would serve as a strong validation for bullish momentum, potentially driving ETH towards $2,881 (0.382 Fibonacci) and eventually to $3,078, which marks a previous structural resistance level.

The RSI remains oversold but has begun showing early signs of recovery, suggesting that a relief rally could be in the making. However, bullish confirmation requires sustained price action above $2,503. 

Conversely, failure to hold above $2,125 would put Ethereum at risk of deeper losses, potentially revisiting the $1,586 support, which coincides with the 0.786 Fibonacci retracement. This zone would act as a last line of defense against a prolonged bearish phase, and its loss could trigger further downside pressure.

ETH Price Prediction

On the hourly timeframe, Ethereum’s price action suggests the early development of a potential five-wave impulsive recovery. After falling towards the $2,125 level, price action is beginning to carve out an initial recovery wave (i), followed by a corrective wave (ii). 

If this Elliott Wave count is correct, Ethereum could extend higher in wave (iii), with a key target aligning around $2,503, which represents the 0.5 Fibonacci retracement and a major resistance threshold.

The confirmation of this impulsive structure hinges on Ethereum’s ability to sustain higher lows and establish a clear upward trajectory. If bullish momentum persists and ETH successfully clears $2,503, the next logical upside targets lie at $2,881 and $3,078, which correspond to both the descending channel’s upper boundary and the 0.382 Fibonacci retracement level of the larger corrective decline. These targets would provide a crucial test for Ethereum’s ability to reclaim a bullish market structure.

Conversely, should Ethereum fail to maintain its short-term impulsive structure, a retest of $2,125 remains likely before another attempt at recovery. A breakdown below this critical support level would invalidate the current wave count, suggesting that the broader corrective trend is not yet complete. In such a scenario, Ethereum could seek lower support at $1,586, where the 0.786 Fibonacci retracement level resides.

Key Levels to Watch

• Immediate Resistance: $2,503 (0.5 Fibonacci retracement)
• Key Support: $2,125 (0.618 Fibonacci retracement)
• Critical Support: $1,586 (0.786 Fibonacci retracement)
• Short-Term Target for Wave (iii): Above $2,503 if momentum sustains
• Invalidation Zone: Below $2,125, signaling further downside risks